LOL! I hunted through the message and the tags but never looked twice at the title.
–
whuber♦Apr 18 '11 at 22:40

2

I would insert a new dataframe, then add the projected data to it...this will set the coordinate system of the dataframe to that of the first added data set. Buffer that file. Are there still any problems?
–
Dan PattersonApr 18 '11 at 22:45

Why don't you just do it in ArcCatalog instead? It will just work off the datum that's assigned to the shapefile if you do it in there (shouldn't be any such problems this way).

Also, if you put everything in to a well-organised geodatabase, all you'll have to do is assign a datum to that geodatabase and it will essentially manage your projections/datums for you. In case you're not familiar with geodatabase, ESRI has a cheap introductory course (only $32.00 US).